PSA - 2019 Universal Registration Document

PEUGEOT S.A. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 Notes to Peugeot S.A. Financial statements

Appendix The followingdisclosuresconstitutethe notesto the balancesheetat 31 December2019,beforeappropriationof net profitfor the year, which shows total assets of €24,843.9 millionand to the income statement for the year then ended, which shows net profit of €1,588.3 million. The financialstatementscover the twelve-month period from1 Januaryto 31 December2019. Notes arean integral partof the financial statements. All amounts are inmillions of euros unlessotherwisespecified. The financial statementsfor 2019 includingexplanatorynotes were approvedfor issue by the ManagingBoard of Peugeot S.A. on 25 February 2020. These financial statements are included inthe consolidated financialstatementsof PSAGroup.

ACCOUNTING POLICIES AND METHODS

NOTE 1

OTHER INVESTMENTS B. Units in FCPR investment funds

General accountingprinciplesintendedto provide a true and fair view of the businesshave been applied, includingthe principleof prudence and the following basic assumptions: the goingconcern; n the continuityof accounting methods from one yearto thenext; n segregation of accounting periods; n in accordancewith the general rules for the preparationand n presentation of annual financial statements (Regulation ANC 2014-03of 5 June 2014, validatedby a Decree of 8 September 2014). Items recordedin the accountsare stated in accordancewith the historicalcost convention. With reference to the ANC (French accountingstandards body) Regulation2018-01of 20 April2018,no changeshavebeenmadeto the accounting method. The main accounting policies appliedare asfollows: A. AND AFFILIATES Since2007,the cost of sharesin subsidiariesand affiliatesincludes transaction costs. In prior years, these investmentswere stated at purchase cost excludingtransactioncosts,exceptfor investmentsacquiredbefore 31 December 1976 that were included inthe legalrevaluation. The asset valuesof investments in subsidiariesare estimatedat the value inuse, based onone ofthe following methods: marketvalue of thesecurities; n share of underlyingnet assets restated in accordancewith the n Group’s accounting principles; the economicvalue of the consolidatedequity of the business n that they represent.This is determinedby the future cash flow generated in the medium term updated every year. The automotivemarket forecasts used in this plan are the Group’s mostrecent estimates,which are based on external data. In the case of a prolonged decline in the value in use of an investmentto belowcost, a provision is recordedfor the difference. If an investmenthas a negative value in use and circumstances warrant it, a provision for contingencies is booked. If sold, sharesare valued using weighted average cost(WAC). SHARES INSUBSIDIARIES

Unitsin FCPRinvestmentfundsare recordedin “Otherinvestments” in full for the amount booked under “Due to suppliers of fixed assets”.The liabilityis graduallycancelledas paymentsare made.If the units’net assetvalue isbelowcost,a provisionis recorded. C. Loans and receivables are stated at their nominal amount. A provision isbookedto cover any probable losses. LOANS AND RECEIVABLES

MARKETABLE SECURITIES

D. Treasury shares

Shares allocated to performance share grants and likely to be deliveredat the end of the vesting period are recordedat a new grossvalueequalto the carryingamountat the day on whichtheir allocation wasdecided.(Note 7) Shares allocatedto performanceshare grants and not likely to be delivered,and thoseallocatedto futuregrants,are recordedat their purchase cost. A provision for impairmentis recordedwhen the marketvalue isless than the carrying amount. Other marketable securities Other marketable securities consist of money market securities purchased under resale agreements. Interest income on these securities is recognised in “Financial income”. No impairment provisionsare recordedfor these securitiesif there is no tangible probabilityof defaultby the issueror of lossexpectedat the timeof purchaseby a third party (firm commitmentto buy at an agreed upon date). E. Untaxed provisionsprimarily concern reinvestedcapital gains on sales of shares in subsidiariesand affiliates qualifyingfor rollover relief under the formerArticle 40of the FrenchTax Code and the tax spreadingout of theacquisition costs on equityinvestments. UNTAXED PROVISIONS

271

GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT